AAFX TRADING

Daily Market Lookup

  • Asian shares rebounded on Friday as comments from a Federal Reserve official eased worries about faster rate rises in the United States, while the safe-haven yen held on to its gains amid heightened volatility across markets. Financial markets have fluctuated wildly this month as investors fretted about how fast the Fed might raise rates in the wake of data showing a pick up in U.S. inflation. Even though broader U.S. price pressures still appear modest for now, markets are now fully pricing in three rate hikes this year, one more than was seen just a few months ago, and some analysts now expect four. That in turn has stoked anxiety that many central banks will start to tighten policy and raise borrowing costs, which will hit corporate earnings, which have boomed thanks to a synchronized uptick in global growth. It is still down more than 4 percent in February so far, however, after global equity markets were mauled at the start of the month by worries that inflation is picking up. All Asian markets except Philippines eked out gains following a sell-off on Thursday after minutes of the Fed’s last meeting showed policy makers were confident about the economic outlook. That prompted some investors to boost the chance of faster rate hikes. St Louis Fed President James Bullard tried to tamp down of expectations of four rate hikes in 2018, instead of the widely anticipated three, saying on Thursday policymakers need to be careful not to increase rates too quickly because that could slow the economy. The Fed had caused a so called “taper tantrum” in May 2013 when it signalled it was time to stop pumping cash into the U.S. economy, a move that created havoc in financial markets particularly Asia. But analysts are more upbeat about the outlook for Asia despite prospects of rising U.S. inflation and rates. Analysts expect the market to be in a “holding pattern” ahead of a slew of important U.S. January activity data on Tuesday, followed by global surveys on manufacturing activity on Thursday. The dollar sagged broadly on Friday after its recovery this week faded as U.S. Treasury yields declined from their recent peaks.
  • The dollar edged up against the yen and other currencies on Friday, trimming earlier losses, as global investors gingerly dipped their toes back into riskier assets amid rapidly shifting views on U.S. monetary policy. The market focus was on whether equities could extend their gains should U.S. yields resume rising. As recently as Feb. 16, the dollar touched a 15-month low of 105.545 yen when the steady rise in U.S. yields triggered volatility in the broader equity market. The prospect of the U.S. government boosting debt issuance to fund expanded stimulus and the Federal Reserve hiking interest rates steadily this year are some of the factors that have contributed to the rise in yields. The yen showed little reaction to data which showed Japan's annual core consumer inflation rate was unchanged in January from the previous month, reinforcing views that the Bank of Japan remains distant from exiting its super loose monetary policy. Japan's nationwide core consumer price index, which includes oil products but excludes volatile fresh food costs, rose 0.9 percent in January. The pace remained far from the BOJ's 2 percent inflation target. St Louis Fed President James Bullard warned on Thursday that too many rate hikes this year would restrict economy growth, and that he did not expect the years of below-target inflation to change rapidly. Gold is sensitive to moves in both bond yields and the U.S. dollar – A weaker dollar makes gold cheaper for holders of foreign currency raising demand while a fall in U.S. bond yields, limits the opportunity cost of holding non-yielding assets such as bullion.
  • Oil prices dipped on Friday as high U.S. crude exports outweighed lower crude inventories in the world's biggest consumer of the fuel. Friday's dips followed bigger price rises the previous day when the EIA said U.S. crude stockpiles fell by 1.6 mn barrels in the week to Feb. 16, to 420.48 million barrels, despite a seasonal slowdown in demand at the end of the northern hemisphere winter season. U.S. crude exports jumped to just above 2 mn bpd last week, EIA data showed, close to a record high of 2.1 mn hit in October. That helped pull down net imports to below 5 million bpd, the lowest level since the EIA started recording the data in 2001. U.S. crude oil production was virtually unchanged last week at 10.27 million bpd, close to levels of top producer Russia and more than OPEC-kingpin Saudi Arabia pumps Globally, however, oil markets remain well supported due to demand-growth coinciding with production restraint led by the OPEC and Russia. U.S. oil production has topped 10 million barrels per day, approaching a record set in 1970, but many investors in the companies driving the shale oil revolution are still waiting for their payday Shale producers have raised and spent billions of dollars to produce more oil and gas, ending decades of declining output and redrawing the global energy trade map. But most U.S. shale producers have failed for years to turn a profit with the increased output, frustrating their financial backers.

 

 
Intraday RESISTANCE LEVELS
23rd February 2018 R1 R2 R3
GOLD-XAU 1,359-1,366 1,350 1,359-1,366
Silver-XAG 17.00 17.40-17.70 18.20
Crude Oil 62.80 63.40 64.00-64.70
EURO/USD 1.2390-1.2450 1.2520 1.2571-1.2600
GBP/USD 1.3950 1.4050 1.4100-1.4170
USD/JPY 107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
23rd February 2018 S1 S2 S3
GOLD-XAU 1,320-1,310 1,303 1,295
Silver-XAG 16.20-15.90 15.60 15.00
Crude Oil 62.20-61.50 61.00 60.10-59.00
EURO/USD 1.2300-1.2250 1.2210 1.2090
GBP/USD 1.3900-1.3855 1.3765 1.3700-1.3650
USD/JPY 106.90 106.00-105.50 104.90

Intra-Day Strategy (23rd February 2018)
GOLD-XAU Sell on Strength
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Thursday made its intraday high of US$1332.03/oz and low of US$1320.87/oz. Gold was up by 0.608% at US$1331.94/oz.

Technicals in Focus:

In daily charts, prices are below 20DMA (1329) and breakage above will call for 1280-1290. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Based on the charts and explanations above; sell below 1331-1366 keeping stop loss closing above 1366 and targeting 1320-1310 and 1303-1295. Buy above 1320-1310 with risk below 1310, targeting 1331-1340 and 1350-1358-1366.

 
Intraday Support Levels
S1     1,320-1,310
S2     1,303
S3     1,295
Intraday Resistance Levels
R1     1,359-1,366
R2     1,350
R3     1,359-1,366

Technical Indicators

Name   Value Action
14DRSI  

46.470

Buy
20-DMA   1334.93 Sell
50-DMA  

1317.69

Buy
100-DMA   1297.85 Buy
200-DMA   1285.18 Buy
STOCH(5,3)   13.163 Sell
MACD(12,26,9)   2.668 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.67/oz and low of US$16.38/oz. Silver settled up by 0.789% at US$16.59/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.82), breakage above will lead to 17.25-17.70. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.00-15.00 targeting 17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 17.00-18.20 with stop loss above 18.20; targeting 16.20-15.60 and 15.00-14.50.

 
Intraday  Support Levels
S1     16.20-15.90
S2     15.60
S3     15.00

Intraday  Resistance Levels
R1     17.00
R2     17.40-17.70
R3     18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.998 Buy
20-DMA   16.73 Sell
50-DMA   16.77 Sell
100-DMA   16.78 Sell
200-DMA   16.83 Sell
STOCH(5,3)   15.384 Sell
MACD(12,26,9)   -0.1082 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$63.00/bbl, intraday low of US$60.69/bbl and settled down by 0.471% to close at US$62.53/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 61.15 which is a major resistance and breakage above will call for 62.20-62.80. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in neutral region and giving positive crossover for confirmation of bullish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 62.80-64.70 with stop loss at 64.70; targeting 62.20-61.50-61.00 and 60.10-59.25. Buy above 62.20-59.00 with risk daily closing below 59.00 and targeting 62.80-63.40 and 64.00-64.70.

 
Intraday Support Levels
S1     62.20-61.50
S2     61.00
S3     60.10-59.00

Intraday Resistance Levels
R1     62.80
R2     63.40
R3     64.00-64.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.373 Sell
20-DMA   62.16 Sell
50-DMA   61.86 Sell
100-DMA   58.45 Buy
200-DMA   53.17 Buy
STOCH(5,3)   71.784 Buy
MACD(12,26,9)   -0.179 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.2259/EUR, high of US$1.2351/EUR and settled the day up by 0.390% to close at US$1.2329/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1700), which become immediate resistance level, break above will target 1.1750-1.1800. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2390-1.2600 targeting 1.2310-1.2250 and 1.2210-1.2090 with stop-loss at daily closing above 1.2600. Buy above 1.2300-1.2090 with risk below 1.2090 targeting 1.2390-1.2450-1.2520 and 1.2571-1.2600.

 
Intraday Support Levels
S1     1.2300-1.2250
S2     1.2210
S3     1.2090

Intraday  Resistance Levels
R1     1.2390-1.2450
R2     1.2520
R3     1.2571-1.2600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.755 Buy
20-DMA   1.2365 Buy
50-DMA   1.2178 Buy
100-DMA   1.1969 Buy
200-DMA   1.1776 Buy
STOCH(5,3)   15.765 Sell
MACD(12,26,9)   0.0035 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3855/GBP, high of US$1.3988/GBP and settled the day up by % to close at US$1.3949/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3431) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving negative crossover to confirm bearish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; short positions below 1.3950-1.4170 with targets at 1.3900-1.3855-1.3765 and 1.3700-1.3650. Buy above 1.3900-1.3650 with stop loss closing below 1.3650 targeting 1.3950-1.4050 and 1.4100-1.4170.

 
Intraday Support Levels
S1     1.3900-1.3855
S2     1.3765
S3     1.3700-1.3650

Intraday Resistance Levels
R1     1.3950
R2     1.4050
R3     1.4100-1.4170

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

51.297

Buy
20-DMA   1.3996 Sell
50-DMA   1.3780 Buy
100-DMA   1.3514 Buy
200-DMA   1.3263 Buy
STOCH(5,3)   27.097 Sell
MACD(12,26,9)   0.0018 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY106.58/USD and made an intraday high of JPY107.76/USD and settled the day down by 0.955% at JPY106.73/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (111.69), which is major support on the daily chart. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 107.50-110.00 with risk above 110.00 targeting 106.90-106.00-105.50 and 104.90-104.20. Long positions above 106.90-104.90 with targets of 107.50-107.90-108.45 and 109.00-110.10 with stop below 104.90.

 
Intraday Support Levels
S1     106.90
S2     106.00-105.50
S3     104.90

INTRADAY RESISTANCE LEVELS
R1     107.50
R2     108.45
R3     109.00-110.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.652 Buy
20-DMA   108.14 Sell
50-DMA   110.35 Sell
100-DMA   111.61 Sell
200-DMA   111.32 Sell
STOCH(9,6)   65.466 Sell
MACD(12,26,9)   -1.006 Sell

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